Dear Colleagues,

 

Members interested in the ongoing saga regarding claims to recover tax found to be incompatible with EU law may wish to note that Vos J has determined the questions to be referred to the European Court of Justice in Littlewoods v HMRC: http://www.bailii.org/ew/cases/EWHC/Ch/2010/2771.html.

 

The agreed questions are as follows:

 

“Question 1:

Where a taxable person has overpaid VAT which was collected by the Member State contrary to the requirements of EU VAT legislation, does the remedy provided by a Member State accord with EU law if that remedy provides only for (a) reimbursement of the principal sums overpaid, and (b) simple interest on those sums in accordance with national legislation, such as section 78 of the Value Added Tax Act 1994?

Question 2:

If not, does EU law require that the remedy provided by a Member State should provide for (a) reimbursement of the principal sums overpaid, and (b) payment of compound interest as the measure of the use value of the sums overpaid in the hands of the Member State and/or the loss of the use value of the money in the hands of the taxpayer?

Question 3:

If the answer to both questions 1 and 2 is in the negative, what must the remedy that EU law requires the Member State to provide include, in addition to reimbursement of the principal sums overpaid, in respect of the use value of the overpayment and/or interest?

Question 4:

If the answer to question 1 is in the negative, does the EU law principle of effectiveness require a Member State to disapply national law restrictions (such as sections 78 and 80 of the Value Added Tax Act 1994) on any domestic claims or remedies that would otherwise be available to the taxable person to vindicate the EU law right established in the Court of Justice's answer to the first 3 questions, or can the principle of effectiveness be satisfied if the national court disapplies such restrictions only in respect of one of these domestic claims or remedies?

What other principles should guide the national court in giving effect to this EU law right so as to accord with the EU law principle of effectiveness?”

 

There remains the question of whether the Supreme Court will consider the various issues arising in the context of these restitution of tax cases. Other members may be better placed with an answer here, but the latest information which I can find is that the result of the application permission to appeal in the FII case is unknown: http://www.supremecourt.gov.uk/docs/PTA-1007.pdf

 

Best wishes,

 

James

 

 

--
James Lee
Lecturer
Director of Careers
Birmingham Law School
University of Birmingham
Edgbaston
Birmingham
B15  2TT, United Kingdom
 
Tel: +44 (0)121 414 3629
E-mail: j.s.f.lee@bham.ac.uk